hore attraction Sustainability and circularity are no longer mere buzzwords in the fashion community, and are increasingly seen as mandatory for business success. Control over supply chains plays an essential role in achieving these goals, including an emphasis on Australian suppliers and manufacturers. Motivations for these changes are coming from external pressures and internal desires, and the industry finds itself at a true inflection point. Matt Jensen, founder and CEO of M.J. Bale, reflects on the motivations for his brand to take more control of its supply chains: “I think any time you go through a pretty exhaustive process like we did to become Climate Active-certified, you come to realise a lot of things about yourself, your business and the industry – most of which are not great. But it’s kind of like going to see a doctor when you’re sick, in order to get the right treatment and medicine, you [first need] the symptoms correctly diagnosed,” Jensen said. Externally, brands are feeling pressure from consumers and regulation. First, consumer desire for traceable and ethical supply chains continue to grow. It has been 10 years since the Rana Plaza disaster in Dhaka, Bangladesh, took the lives of over 1,100 garment workers, gravely injured thousands more, and awakened the contemporary ethical fashion movement. Consumer enquiries into supply chains are becoming more sophisticated, and consumer patience is wearing thin for brands that don’t appear to take traceability seriously. While ‘Made in Australia’ doesn’t necessarily guarantee ethical practices, consumers find it preferable, and recent data tells us that 43.4 per cent of fashion shoppers look for Australian made. Furthermore, over 40 per cent of Australian consumers say they value sustainability and it drives their purchasing decisions, though there are concerns over affordability and not being able to find sustainable fashion where they typically shop. From a regulatory perspective, supply-chain traceability is a musthave, even down to the raw material suppliers. In particular, the Uyghur Forced Labor Prevention Act (UFLPA) in the US prevents goods produced wholly or in part in the Xinjiang region of Northern China from entering the country. This means that any fashion brand wishing to sell goods in the US must have complete oversight of its supply chains, from farm to manufacture, and be able to prove it to US Customs at the time of import. Since the Xinjiang region accounts for 20 per cent of the world’s cotton production, many brands are at risk of being implicated. The European Union (EU) also has a raft of regulations that affect brands wishing to import into that market, to support the European Green Deal, which plans to reduce CO2 emissions by 55 per cent, compared with 1990 levels, by 2030, and be climate neutral by 2050.  In March 2022, the EU Strategy for Circular and Sustainable Textiles was announced, which envisions that “all textile products placed on the EU market are durable, repairable and recyclable, to a great extent made of recycled fibres, free of hazardous substances, produced in respect of social rights and the environment.” In 2024, the Green Claims Directive comes into effect, which will dictate that brands cannot make unsubstantiated environmental claims in any consumer-facing communications.  Finally, and potentially most impactful, the Digital Product Passport will be required for all apparel by 2026, meaning that brands wishing to sell into the EU will be required to have complete traceability of their goods.  It is easier to control the human rights and environmental impacts within supply chains if most suppliers are on shore. It is also much easier to obtain the data to perform due diligence around transparency and reporting when you can regularly visit the suppliers within Australia.  Reporting requirements will only increase as regulations come into effect, and many of Australia’s largest retailers are planning for that inevitable future by setting their sites on local production. Supply-chain shortcomings For those brands and retailers looking to on-shore production, there are a few hurdles to overcome. A representative from R.M. Williams explains, “There are many challenges to us bringing back high-volume manufacturing to Australia, as the entire infrastructure has been eroded – from machine builders, laundries and skilled workforce, to raw material suppliers. The reality is that manufacturing in Australia has an inherently higher cost, and we’re looking at how we work with partners and rebuild the hidden infrastructure needed to support Australian production.” Throughout the industry, the challenges are felt at all stages of the supply chain. First, there is a shortage of skilled machinists to work in local production facilities. Machinists can be expensive to train, but also, other industries pay better than the fashion and textiles industry for similar (and sometimes even simpler) work. There is also shrinking interest in these types of roles from younger generations, with most students undertaking fashion and textiles degrees being drawn to other roles. The skilled tailors, machinists and buttonholers that held up Australia’s local industry are reaching the age of retirement, with no younger workers waiting to take their place. This may be the largest barrier to overcome for businesses wanting to secure onshore production. If we look at our supply chains, starting with raw materials, we identify other challenges. While Australia produces high-quality cotton and wool, desired by fashion brands all over the world, we have a stark lack of capacity to process those raw materials into fabrics. For example, while harvested cotton is ginned in Australia, over 99 per cent of the product is sent overseas for the next stage – spinning into yarn. Spinning includes a variety of processes, including cleaning, carding, combing and more to make the raw fibres ready to spin. Once fibres are finally spun into yarn, they can be woven or knit into fabrics. Fabrics then typically undergo a range of other processes, such as scouring, bleaching, dyeing and waterproofing, before they are used to create garments or other textile goods. There is a similar story in the wool industry, with 98 per cent of wool being exported. Australia simply lacks the capacity to process our world-leading natural fibres into fabrics onshore. M.J. Bale’s Jensen explains, “In an ideal world, we would make each garment up the road from where we grew, processed and spun the fibre. In a sense, we did this with our Lightest Footprint project last year. We cycled our methane-reduced wool from the beautiful farm where it was produced – Kingston in the Tasmanian northern Midlands – then sailed the wool up the East Coast of Tasmania and across the Bass Strait to Geelong. The wool was processed there in Geelong, then spun into yarn in Macclesfield and finally knitted into sweaters by lovely Val there in Ballarat. It was a beautiful test case, and if we only sold hand-knitted 5-ply yarn sweaters in our 80-odd stores, it would be fantastic for the environment and our carbon footprint.” Sustainability expert Rosanna Iacono works with clients throughout the industry, and reflected that many of her clients say the biggest issue for onshoring production is that “there simply isn’t enough supply to meet the demand; and they see no light at the end of the tunnel – no one investing in scaling up capacity.”  We can start by embracing technology and advanced manufacturing. As part of its Lightest Footprint project, M.J. Bale use alternative transportation methods. Supplied The future of Australian fashion  Extensive investment and a cultural shift in how we value garment workers are essential to onshore Australian fashion production. This type of change takes time and commitment from across the industry and the government, but also requires a shift in consumer price expectations – which have become much tougher to meet over the past two decades – due to the rise of the fast fashion business model. The barriers faced by Australian fashion retailers in creating wholly sovereign supply chains are not insignificant – so where can we begin? We can start by embracing technology and advanced manufacturing for some onshore production. While technology cannot replace the hands-on nature of much fashion production, nor should we advocate replacing jobs with machines, some technologies can support greater control over supply chains and, typically, improve sustainability measures. New technologies are also essential for a transition to circular fashion business models, particularly at the stages of material recovery and recycling. One example of technology-aided onshore production is the use of advanced manufacturing wholegarment knitting machines. This equipment can produce low-to-no-waste knitwear, and easily accommodates made-to-order production. There are only a few of these machines in Australia currently, but it is easy to imagine a factory running multiple machines to produce high quality, low-impact knitwear. Positioning this factory to take advantage of the Australian sun would reduce the environmental impact even further. While the challenges of onshore raw material processing remain, we can begin to see how Australia’s valuable natural resources could be turned into high-quality textiles and garments in a low-waste, low-impact facility. Circularity is sure to be a rising factor in supporting more technical advances, particularly as the Australian Fashion Council (AFC) has a strategic aim of achieving circularity by 2030. This aim is supported by the recently launched Seamless, a National Clothing Product Stewardship Scheme for Australia. While currently a voluntary scheme, Minister for the Environment and Water Tanya Pliberseck has given a clear directive to Australian retailers: “If the voluntary scheme is not viable – if we don’t believe it’s sufficient, or if it’s not raising enough money to cover its costs – then I will regulate.” Leila Naja Hibri, AFC CEO said, “Building the future manufacturing capacity of our industry is critical for our transition to a circular clothing economy. The digitisation of time- and resource-intensive processes like physical sampling will unlock our ability to right-shore selected production capabilities, and begin to close the loop on our supply chains.”  She is referring, in part, to 3D software used to lessen the environmental impact of production. In the AFC’s inaugural FashTech Lab program, by producing 30 digital samples in place of physical samples, participants achieved a 50 per cent reduction in sampling costs, a decrease in sampling time from 12 weeks to four, and up to 450 metres less textile waste. Each of these technologies starts to paint a picture of a future fashion industry in Australia bolstered by the latest innovations. The complex issues we face as an industry demand complex solutions. It’s time we channel the creativity inherent in our industry toward innovations that will dramatically improve the state of the industry, its people, and the planet. As Jensen said, “We don’t have the industry here in Australia to produce high-quality garments at a scale that makes business sustainable. Hopefully, collectively as an industry we can change that, because we need to be able to look our children and grandchildren in the eye and say, ‘We  did everything we could to make your future better.’ ” This story first appeared in the August 2023 issue of Inside Retail Australia Magazine.